The Canadian Musical Reproduction Rights Agency Ltd. and the Canadian Recording Industry Association have entered into a new mechanical licensing agreement that will run through 2012.

The deal, which was concluded after a lengthy negotiation, will result in a licensing process that will be conducted entirely in an electronic form, eliminating the need for paper forms. David Basskin, president of CMRRA, which represents a majority of music publishers in Canada, said the new deal works as a business arrangement and is positive for the environment.

"This agreement follows a year of detailed negotiation and hard work by our respective teams," Basskin said. "While these are challenging times for music publishers and record labels alike, it's gratifying to see what can be achieved by parties working towards a common goal - namely, a fair agreement that establishes reliable ground rules for what is still a very important business. The labels' agreement to leave the era of paper transactions behind is particularly welcome. Moving mechanical licensing entirely into the electronic realm will mean greater efficiency and faster payment for the songwriters and music publishers we represent."

Under the deal, the rate for mechanical licensing is $0.081 ($0.084 US) per track, where the running time of the recording is five minutes or less, plus $0.0162 ($0.0168 US) for each additional minute or partial minute of running time. After 2010, the rates increased to $0.083 ($0.0865 US) and $0.0166 ($0.0173 US).